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This new strategic plan announced by Flavio Cattaneo, who took up his post last spring, has everything going for it at first glance. A reallocation of capex revised slightly downwards with more in Grids, less in Renewables, still no offshore wind and more financial discipline enhanced by a cost-cutting plan. Everything sounds aligned with what investors want to hear at the moment.
Companies: Enel (ENEL:BIT)Enel SpA (ENEL:MIL)
AlphaValue
A strong quarter for Enel has resulted in a better-than-expected performance, particularly in the End-user markets. This, combined with the positive results in the grid activities in LATAM and the renewable activities of Enel GreenPower, helped offset lower results in Thermal Generation and Trading. As a result, the high end of the guidance for full-year 2023 EBITDA has been raised by €1.5 billion.
As expected on the track of Q1, energy prices weighed on Enel’s revenues but the group succeeded in generating higher margins in the backdrop of a better operating performance by Enel Grids and its final customers of End-User Markets. The group confirmed its FY2023 ordinary EBITDA guidance of €20.4-21bn, a DPS of €0.43, and indicated c.60% of the €21bn asset disposal programme has already been achieved.
Like a few other peers in the sector, the normalization in energy prices weighed on Enel’s revenues in the Q1 which recorded a 22.6% drop to €26.141bn. This was owing, in particular, to Thermal Generation and Trading as well as the End-user (retail) market. The Italian utility remains however confident in its ability to achieve its assets disposal plan and net debt reduction target for the year. The new touchy topic is now focused on governance and the ew board to lead the Italian liner.
After a challenging 2022 and a disruptive energy market environment, Enel met its guidance provided during the last CMD back in November and even delivered higher-than-expected operational profits, supported by both higher volume and of course a price effect. Although the group managed to land on its feet and deal with last year’s liquidity issues, net debt reduction through assets disposals will remain the main topic in 2023.
Enel reported a 84% increase in revenues to €108.177 bn, attributable to all business units and mainly driven by a rise in the volume of gas and electricity sold at a higher average price amidst the prevailing energy crisis as well as an increase in electricity generated. Rising sourcing costs together with a significant drop in hydropower generation due to a poor water supply weighed on ordinary EBITDA for the 9M2022 period, down 0.8% to €12.68 bn.
While there were no surprises on the results side which came in bang in line with expectations, Enel reassured the market with a series of positive comments. What may seem trivial in normal times is now valuable in a context wherein the share price has collapsed by c.40% over the past year. This paves the way for a return of investor confidence in a company that deserves it – and can embody good value for money.
Strong operational results but soaring net indebtedness are the two key takeaways from Enel’s Q1 22 release. In our view, they offset each other, resulting in a mitigated set of results, even if we want to believe that the good results will recur and the higher debt is temporary. It does however add uncertainty to a business that did not really need it, confirming our preference for pure players versus integrated utilities during such times. Meanwhile, wait and see.
Enel surprised the market by delivering strong FY21 preliminary results (revenue + EBITDA). While we do not yet have the exact breakdown, there is no doubt that the gas-related activities have more than outperformed. In the footsteps of RWE a few days ago, the read-across is obvious for Engie, Fortum, Iberdrola and EDP. In the light of these elements, we reaffirm our bullish view on the sector.
Despite several regulatory and FX headwinds, Enel met expectations with EBITDA 1.7% above consensus. However, a substantially higher net debt raises concerns on the mid-term outlook and 2030 roadmap, for which we expect un update during the CMD on 24 November. FY21 guidance remains unchanged, even if we stand slightly below, and the same applies for consensus. Positive view confirmed as headwinds seem already priced in and the CMD should provide short-term catalysts.
What if the best solution for the energy transition were … nuclear power? Nuke is back at the heart of political debates in the context of the current energy crisis and massive but insufficient investments in renewables. This short review provides an overview of nuclear power in Europe and speculates on options. This ‘nuke optionality’, hinging on a favourable green taxonomy, is a game-changer for EDF, Centrica, Fortum but also Engie, Iberdrola, Enel and EDP.
After a complicated first quarter which was hurt by FX, Enel posted a slump in EBITDA (-4.9%) as one-offs and FX continued to offset additional renewables capacities and the great recovery in Italy and LatAm. On the positive side, capex remained in an upward trend, even if it mechanically weighed on net indebtedness. This did not prevent the group from confirming its FY21 guidance. Positive view confirmed.
Enel released a set of half-tone Q1 results. EBITDA is down by 12.3%, hurt but one-off items and a negative comparable effect but, above all, still affected by adverse FX movements that could become recurring. Guidance for the full year is confirmed, but we are now targeting the bottom of the range. In all, our positive view is reiterated.
Enel released globally sound FY20 figures, driven by net income and dividend that both beat estimates. The FY21 outlook is confirmed, while mid-term targets for net income and dividend were slightly improved. The group continues offering good visibility on its activity and is massively investing (€10.2bn capex), especially to reinforce its European leading position in renewables. Positive view confirmed.
Enel has set ambitious renewable energy targets at the 2030 horizon coupled with an accelerated coal exit. In addition, investment in new technologies (batteries and hydrogen) should protect its status as a cutting-edge company. The group will also massively invest to upgrade its networks in Europe, to limit operating costs and cope better with the increasing weight of renewables. We confirm our recommendation. Enel is currently among our top picks.
Companies: Enel SpA
Research Tree provides access to ongoing research coverage, media content and regulatory news on Enel SpA. We currently have 91 research reports from 2 professional analysts.
Jersey Electricity (JEL) is intensifying its focus on energy security and electrification across Jersey by creating opportunities to accelerate growth. It successfully navigated the volatile wholesale power price environment in 2020–23, shielding its customer base from the worst inflationary pressures. However, from 2025, as older, more favourable hedges expire, this protection will diminish. Therefore, we have marginally reduced our earnings forecasts to account for the increased exposure to wh
Companies: Jersey Electricity plc Class A
Edison
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Liberum
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SP Angel
Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k
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Shore Capital
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Cavendish
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An encouraging set of half year results from National Grid, reflecting the resilience of the model in a challenging and turbulent macroeconomic environment, mainly driven by the regulatory frameworks and electricity transmission and distribution. National Grid upgraded its Capex guidance to £40bn between 2022 and 2026 to accelerate its transition to low carbon generation and enhancing its UK and US electricity distribution as well as the underlying EPS growing in the middle of the 6-8% CAGR rang
Companies: National Grid plc
National Grid published strong FY22/23 earnings (year ended March 31) reaffirming the strength of its business mix during inflationary periods. The group completed its strategic pivot with the disposal of 60% of the UK Gas assets to focus mainly on electricity transmission/distribution over an intensive 2026 £40bn capex plan. The outlook over the five-year period 2020/21 to 2025/26 remains unchanged.
On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div
Companies: PTAL GHH IGP MSLH PINE NXQ EQLS NXR AXL
Zeus Capital
Strix has reported FY23 results to 31 December 2023 with adjusted PAT of £20.1m, in line with our updated forecast and company guidance provided in January. Revenue grew 35.2% to £144.6m, benefitting from the full year inclusion of the Billi acquisition, albeit slightly below our forecast of £151.0m. Its core Kettle Controls division also performed robustly, growing 2.7%, ahead of the broader market and indicating market share gain. Recent acquisitions have noticeably improved the Group’s growth
Companies: Strix Group PLC
Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.
Companies: Severfield Plc
Progressive Equity Research
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Invinity is making major progress commercially, technically and financially. A full manufacturing agreement has been signed with Taiwanese partner Everdura. This brings additional manufacturing capacity to serve the existing re-seller agreement without the need for new capital. Validation testing on the next-generation Mistral flow battery has verified performance targets, paving the way for commercial launch later in the year. Finally, discussions on one or more strategic partnerships are progr
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Longspur Clean Energy
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